If the PTAB Denies Institution Based on a Reference under Phillips, Does that Mean it was not Material Under BRI?

The decision in Jaguar Land Rover Ltd.v. Bentley Motors Ltd (E.D. Va. Apr. 30, 2020) (here) merely denied an amendment to add a counterclaim for inequitable conduct. There are a lot of those. But it is interesting because it brings into play the new approach PTAB uses of determining unpatentability with the Therasense approach to determining materiality based upon the broadest reasonable interpretation.

The accused infringer filed for institution of an IPR of the ‘828 Patent based upon what the parties called the Porsche 959 prior art. The accused infringer also defended the suit for infringement of the ‘828 patent by, among other things, asserting the Porsche 959 prior art anticipated.

While the IPR petition based upon the Porsche 959 art was pending before the PTAB, the accused infringer sought to amend its answer to allege a counterclaim based upon the failure to disclose the Porsche 959 art to the Office during prosecution, asserting inequitable conduct.

On February 20, 2020, the PTAB denied institution, but it did so based upon the November 2018 rule change to use Phillips interpretation for unpatentability. ( here) So, we know that, at least based on the PTAB’s construction and the record made there, under Phillips the Porsche 959 art didn’t anticipate.

But, in denying the motion to amend the answer to add inequitable conduct, the trial court relied upon the PTAB decision to hold that it would be futile to permit the amendment. It reasoned that it was implausible that the Porsche 959 art could have been but-for material because of the PTAB’s decision.

But Therasense requires materiality be based upon the broadest reasonable interpretation standard, not Phillips. Thus, the PTAB decision doesn’t decide materiality: if anything, it decided there was no anticipation based on the PTAB’s claim construction under Philips.

Even weirder, the trial court held in denying amendment that it could still find invalidity based upon the Porsche 959 prior art. If anything, that would be precluded by the PTAB’s decision (I’m not even sure that’s right, however). Finally, and I may be misremembering (I’m grading finals!), but I thought there was also Federal Circuit precedent finding materiality even on submitted art? (I know you can find invalidity that way.)

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.
View all posts by David →

5 thoughts on “If the PTAB Denies Institution Based on a Reference under Phillips, Does that Mean it was not Material Under BRI?”

“While the IPR petition based upon the Porsche 959 art was pending before the PTAB, the accused infringer sought to amend its answer to allege a counterclaim based upon the failure to disclose the Porsche 959 art to the Office during prosecution, asserting inequitable conduct.”

I am puzzled – since when is IC even material to an IPR petition?

I had been under the impression that IPRs were severely limited to ONLY matters of prior art. See 35 USC 311(b) SCOPE (emphasis added).—A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.

Yeah, I could have been clearer. (You try grading….). The PTAB found no claim unpatenable over the Porsche 959 art. The district court reasoned this meant the Porsche 959 art couldn’t be material.

But, the PTAB applied the new rule (Philips-style claim interpretation), not BRI. So, under its claim construction, no anticipation. But the Porsche 959 could be material under BRI since (usually) it’s broader.

So it used to be, maybe, that if the PTAB found patentability, that would translate to no materiality, but not any more…. And, of course, 37 CFR 1.56 is much broader than the approach the PTAB is applying to determine patentability.

It also may have helped to read the hyperlink and see that what you are talking about is NOT the IPR process, but the Article III process back in Article III land.

That being said, any motion during IPR for IC should have been quashed and should have NO bearing in the Article III forum by way of bootstrapping through the different forum of the non-Article III administrative agency proceeding.

IF a separate — and fully based on NON-IPR points is made, then that may be evaluated entirely on its merits.

Any attempt to delve back into IPR land should be a non-starter on its own.

37 CFR 1.56 is — and remains — an entirely different animal. There MAY be an interesting twist that is may become resurrected AT the initiation decision point of an IPR, given that AT THAT POINT there is a takings of (at least) the presence and level of the presumption of validity and the fact that the patent holder has less than their full bundle of property sticks while IN the administrative forum.

Patentee took result from IPR — no anticipation based on Phillips — and used it in litigation to assert “no materiality” based on BRI. Judge agreed even though the fact that the 123 patent doesn’t anticipate a (likely) narrower claim construction doesn’t mean it doesn’t anticipate a broader one.

Equating no anticipation under Phillips with no materiality under BRI is the problem.